Too Sneaky, FINRA Tells Mom & Kids

LOS ANGELES (CN) – A mother and her children took securities regulation tests 64 times — not to qualify for anything, but to memorize the questions and sell them for profit, FINRA claims in court. The Financial Industry Regulatory Authority sued Training Consultants LLC, Christian Leahy and her children Donald, Samuel and Elizabeth Leahy, in Federal Court. FINRA claims that the Leahys “failed 52 of the 64 examinations – a failure rate of over 81 percent, which is highly unusual, particularly given that all the failures include repeated failures of the same exams and given that they all work for defendant Training Consultants, which purports to train candidates to take FINRA’s exams. Further, they have failed the exams with unusually low scores, (i.e., answering fewer than 40 percent of the questions correctly),” according to the complaint. (Parentheses in complaint.) FINRA claims that the Leahys “each took, and plan in the future to take, the FINRA secure tests with the intent not to pass the exams but to memorize and improperly use the multiple-choice questions, as well as to retain the ability to take the exams additional times.” FINRA says its copyrighted exams “are unpublished, secure examinations, and the questions (sometimes referred to as ‘items’) are not intended to be made available to the public. Unauthorized disclosure of secure test items compromises FINRA’s examinations and undermines FINRA’s qualification assessment process.” FINRA says the Leahy family owns and operates Training Consultants LLC, which, according to its website, “advertises and sells both online and in-person preparatory courses, as well as textbooks, for FINRA’s examinations, including the FINRA secure tests.” FINRA says that “Christina Leahy has been associated with FINRA member firms going back to 1977. Christina Leahy was also a member of the Series 7 exam committee between approximately 1985 and 2006. The Series 7 exam committee is composed of FINRA staff and industry volunteers who write, review and validate … test questions for the Series 7 exam.” FINRA claims that “between October 2001 and August 2012, Christina Leahy, Donald Leahy, Samuel Leahy and Elizabeth Leahy collectively took 64 FINRA standardized examinations, including the FINRA secure tests, which is a highly unusual number of times to take examinations. Each of them has enrolled to take additional examinations sometime prior to November 7, 2012, including exams that are not reasonable to take in combination, particularly within such a short period of time. “Prior to taking each FINRA standardized examination, including the FINRA secure tests, defendants Christina Leahy, Donald Leahy, Samuel Leahy and Elizabeth Leahy agreed to the Rules of Conduct and expressly agreed ‘to maintain the confidentiality of the materials, including the questions and my answers to them.'” FINRA adds that “one of more of the defendants have copied multiple-choice questions from the FINRA secure tests, and/or created derivatives of the FINRA secure tests and/or FINRA’s proprietary questions, and have distributed to others multiple-choice questions that were the same of substantially similar to the FINRA secure tests and/or actual multiple-choice questions in the FINRA secure tests, and used them for training Training Consultants’ customers to take the FINRA secure tests, including for practice exams.” FINRA seeks an injunction, destruction of offending materials, and punitive damages for trademark infringement, misappropriation of trade secrets, breach of contract and violations of the California Business and Professions Code. It is represented by Carla Oakley, with Morgan, Lewis and Bockius, of San Francisco.